Sales Tips: The Key to Being a “Customer-Centric” Organization

An August 23rd newswire summarized the findings of a survey done by Pegasystems with 250 global financial services companies. Some of the results:

79% agree financial institutions will move from product-based selling to focus more on personal relationships in the next 5 years.

Only 31% deploy relationship-based sales models to any degree and only 1% fully leverage them.

29% are mired in product-based selling.

As with changing the direction of a battleship going full steam ahead, getting your organization to migrate to relationship and buyer outcome selling is not something that can happen overnight.

A common misconception is that becoming “customer-centric” is something to be done by Sales with support from Marketing.

Merely making someone responsible for “Sales Enablement” means paying lip service to an outcome that is difficult to achieve.

The major hurdle is overcoming the intense focus on products, a company-wide affliction that stifles attempts to put customers/buyers first.

Product sales are more about offerings, less about buyers and more likely to result in lower margins.

In coauthoring Rethinking The Sales Cycle (published by McGraw-Hill in 2010) we were unable to find a B2B vendor that could serve as a model for being customer-centric. Instead we had to use Apple as an example. It remains to be seen how the longer term will be, but the brilliance of Steve Jobs had a tremendous impact. Unlike virtually all competitors Apple has not sold computers. Other computer companies sell processing power, disk capacity, etc. that lead to commodity decisions.

CEO Steve Jobs had the remarkable ability to understand what the market wanted and then create offerings that people wanted to buy.

He was maniacal about dictating the design and functionality that would resonate. As an Apple customer since 1990 I’ve continually bought their desktops and laptops without considering alternatives that likely cost 50% less. Apple offers reliability, support and has become an integral part of my life via iPhones, iPads, iPods, etc.

Absent a genius like Jobs, it’s incumbent upon companies to learn their customers’ requirements.

Product-focused companies create offerings they think buyers will want and then ask Sales and Marketing to use “push” strategies to sell to their markets.

I hope you see how flawed this approach is.

Shifting to a “Pull” StrategyAs an alternative, vendors that create organizations that can listen to their customers and articulate needs to Product Development enjoy the advantage of creating offerings that people are more likely to want to buy. They can enjoy higher revenue due to “pull” of market demand.

The primary takeaway from the changes in buying behavior over the last 15 years that vendors should realize is that buyers want to exert more control in making buying decisions. They don’t want to be “sold” (manipulated by salespeople). Instead they want to be empowered to buy offerings that enable them to achieve desired business outcomes.

Organizations that want to be customer-centric can’t get away with a new coat of paint.

Teardowns are required to shift from inside-out views of markets to outside-in views where customer needs are the fuel that propels Product Development.

This requires significant organizational change, but vendors that are successful in this migration can enjoy a sustainable competitive advantage over their competitors that continue to use selling approaches that buyers have rendered obsolete.

Since the turn of the century we’ve never seen the runaway revenue growth of the 90’s that vendors enjoyed. I find it odd in light of all the DIY purported “buying activity” via the Internet and social networking. It is time to realize the difference between product evaluations done by mid to low level staff versus corporate initiatives to improve business results that will provide the necessary value to provide payback.

Vendors need to position themselves to proactively use top-down strategies to qualify opportunities. In order to do so vendors must provide sellers with business results that have been or can be achieved through the use of their offerings. When calling high, executives don’t want to learn all about a vendor’s offerings.

👉 To better align, sellers should discuss business outcomes and how offerings can be used to achieve them.

Executive would be more open to vendors that realized product pitches are relics of the past when sellers pushed products.

By John Holland, Chief Content Officer, CustomerCentric Selling®

A common misconception (maybe perpetuated by Procurement) is that price is the primary reason for making buying decisions of non-commodity items. Many salespeople are tentative or defensive when providing prices.

Either verbally or via body language sellers send messages to buyers that quotations aren’t set in concrete.

Price is an important component in making decisions and I wanted to share a few thoughts on when and how to provide pricing.

Sellers open themselves up to pricing questions when they mention product prematurely. Once product is on the table it’s reasonable for buyers to ask: “How much?” This question often elicits slippery (“your mileage may vary”) stereotypical responses from salespeople. At some level they know providing price isn’t the right thing to do at this point.

❗ TIP: My suggestion in situations where value hasn’t been established is to tell buyers that you can’t give an accurate estimate until you better understand their requirements and ask if pricing discussions can be deferred. Most buyers will give sellers this latitude.

Others will persist and want pricing now. They’ll become frustrated with sellers that don’t respond. Years ago I would give these buyers a range. The problem in doing that was they would always remember the lower number and try to hold me to it.

❗ TIP: I found a way to prevent that from happening by offering them a “not to exceed” number. If after sharing that number I needed smelling salts to revive a buyer it was likely:

This company wasn’t a prospect

I needed to call higher

In my experience the higher a seller calls, the lower the likelihood there will be early questions about pricing.

This may be due to the fact that higher levels aren’t limited by budget. If a new initiative offers more value than planned acquisitions executives have the ability to re-allocate budgets.

👉 Bonus Tips:

I also suggest buyers should know the pricing soon after they understand value. Ultimately price is a qualifier and should be provided fairly early in the buying process.

I also believe an important factor in reducing negotiations is the level of the person sellers ultimately close. If you’re selling technology and ask IT or Procurement for the business, brace yourself for several hard pricing squeezes. In stark contrast if you’re closing a line VP who understands the potential value, protracted negotiating sequences are less likely.

Sellers are usually viewed as people that must push sales cycles forward. Once Key Players understand value they recognize there is a cost of delay and want to move through buying cycles to start reaping benefits.

Sales Tips: Stop Clinging to Old Selling Approaches

By John Holland, Chief Content Officer, CustomerCentric Selling®

Over the last decade vendors began to evaluate buying experiences they were providing. The truth be told, many were motivated by a shift in power as buyers leveled playing fields with sellers by using the Internet and social networking.

Selling approaches have changed at a glacial pace.

Most vendors deserve low grades or “incompletes” for their efforts to improve the way they treat buyers. Creating Sales Enablement functions without the needed organizational changes has been the equivalent of applying Band-Aids when surgery was needed.

It seems to me there’s a fundamental flaw in the way vendors look at buyers.

For decades sales organizations have viewed a seller’s job as getting buyers to do what they wanted them to do (buy).

If buyers raised objections sellers were taught how to overcome them. Some sellers welcome objections because each one that is overcome means they are a step closer to getting the business. They subscribe to the theory that selling begins when buyers say no. What a horrible way to treat people trying to make buying decisions.

The Internet and social networking allowed buyers to see an alternative to “being sold.” The problem in my mind has been that executives lack the time and most websites lack the content to engage them.

This has some important implications:

Many “buyers” doing product evaluations have neither budget nor support from executives in their companies.
There is little if any need development to estimate the potential cost vs. benefit and assess if there is potential value.
As with many things in business the pendulum of control seems to have shifted in buyers’ favor.

That said, evaluating offerings before understanding whether purchases can be justified can result in wasted time, effort and resources.

Buyers doing product evaluations are fortunate if they encounter a competent seller to pull them back to identify potential desired business outcomes and re-evaluate the capabilities needed to achieve them.

The challenge to vendors is developing salespeople with the skills needed to help buyers migrate from product evaluations to building business cases.

If done properly sellers can get away from attempting to make people buy. Buying committees that define their desired business outcomes, understand why they can’t be achieved and are aware of the capabilities needed become empowered to buy. Vendors that can teach their sales staff how to execute business outcome rather than product sales will provide superior buying experiences.

Realizing people prefer to buy rather than be sold is a significant step in improving buyer experiences.

As soon as our children could talk, they resisted attempts to convince or persuade them to do things my wife and I wanted them to do.

Why do vendors cling to an obsolete definition of selling that buyers will resist? They want to be empowered to buy.

Sales Tips: 4 Unexpected Benefits of Customer Experience Programs

Win loss analysis is not the only form of buyer analysis. Another one occurs long after the sale. Customer experience interviews focus more on the product and solution than on the buying process and provide insights on key capabilities, missing capabilities, and ideal market profiles.

Customer experience touchpoints should occur immediately after the initial implementation of your solution and again periodically throughout the life of the solution’s use. A common practice is to engage with customers every six months to measure their satisfaction and identify areas for improvement in product, support, and training.

During its research, Primary Intelligence discovered four unexpected benefits from Customer Experience programs:

1. Quantification of Customer Feedback
While many times company executives, especially, believe they understand the desires and preferences of their customers, their beliefs may hinge on a small handful of data points or customers who are particularly vocal yet don’t represent the preferences of the organization’s larger customer base. Collecting Customer Experience information from a larger, broader set of voices helps to identify the most salient issues to the widest group of customers. It can also provide insights on how best to address the issues.

One Customer Experience (CX) practitioner, in describing the quantitative benefits of his organization’s Customer Experience initiatives, highlighted the incorporation of CX data into quarterly metrics, allowing this company to track CX feedback monthly and report statistics to C-level executives.

In this way, there is transparency and accountability in terms of understanding “what’s going on, where we’re making improvements, and what we’re doing to change.” As this individual noted, “I think that’s helped us a lot to try to incorporate voice of the customer type of data and change our process and do better.”

2. Benefits to a Broader Audience
Customer Experience practitioners also highlight extended benefits of their programs, such as implementing changes to a product or service that will benefit the entire customer population. In those instances, taking a pro-active approach leads to reduced customer complaints and improved customer retention over the long term.

For example, one manager for major markets in the business process outsourcing industry told Primary Intelligence during a telephone interview that, “There have been some things that have taken off really well in accounts, and we’ve been able to push it out to other accounts. That was done pro-actively before the second or third client said something.”

3. Increase Product Competitiveness
An extended benefit is the ability to increase product competitiveness. In our research, customer experience practitioners shared that they became aware of desired or missing features. This discovery led to product or service changes that will benefit their entire customer population. In those instances, taking a pro-active approach leads to reduced customer complaints and improved customer retention over the long term.

In one instance, an insurance company used areas it identified as being major drivers of customer satisfaction or loyalty and tracked these metrics on a monthly basis, managing to those areas where there were both gaps and opportunities.

4. Understanding Data Cleanliness
Understanding how clean—or dirty—organizational data is that relates to customers can also be an extended benefit of CX analysis. While most organizations have mastered the ability to accurately track customer purchases, support issues, and other interactions customers may have with them, understanding the nuances of what’s working and not working can be an added benefit from CX programs.

As one senior director working in a call center noted, “Closure on service requests … still tended to be a little bit squishy.”

In this instance, even after an issue was thought to be resolved, the organization learned that there were reoccurrences of the same issue with the same customer. Through detailed analysis of customer feedback, the organization was able to identify and implement a more rigorous closure process that has reduced post-closure escalations significantly.

Sales Tips: Do Your Buyers See Sufficient Value?

By John Holland, Chief Content Officer, CustomerCentric Selling®

My view is that too many “opportunities” ultimately end with buyers making no decision. This is an unfortunate outcome for all vendors that were involved but also represents a waste of time, effort and resources for companies doing evaluations.

One of the major reasons for no decisions is a lack of adequate payback/value. I believe many sellers would struggle to help create an enterprise view of potential value.

Buying cycles that will become committee decisions are far more complex for sellers to execute. It is important that there be some identified benefit for each major stakeholder if a purchase is going to be made.

CCS® helps clients identify the titles that are likely to be involved if a seller is going to sell, fund and implement offerings. These stakeholders have different objectives and business outcomes they hope to achieve in making purchase decisions.

Many sellers are unable to gain access to all the stakeholders by:

Starting with levels in the organization whose interest is primarily in offerings rather than business outcomes.

Asking lower levels for access to other titles. There are 3 ways of gaining access to stakeholders listed here in decreasing degree of probability of being successful:

In my experience top-down access has the quickest and highest probability of conducting successful sales/buying cycles.

I say that because decision maker levels will self-qualify. By that I mean if they don’t see adequate potential value they won’t waste their nor their subordinates’ time.

When calling on each Key Player, sellers should have menus of potential business outcomes and uncover as many as possible.

By doing so sellers have the ability to summarize potential value for each person involved in the decision. Often it is necessary to help buyers understand their baseline metrics (where they are without the seller’s offering) and have them project the potential improvement. It is important that the Key Players quantify the results they feel they can achieve.

At some point in the buying cycle it can be a competitive differentiator to have the committee realize the total potential value of moving forward with a seller’s recommendation. This approach can neutralize what may be a seller’s most formidable competitor: No decision.

Sales Tips: Handling RFP’s You Did NOT Wire

By John Holland, Chief Content Officer, CustomerCentric Selling®

In the first months of my career I received an RFP from the US Coast Guard Academy. My initial excitement faded as realized it was for equipment totaling about $6,000. Despite the fact that they had several of these devices installed and there was no competition I had to make a detailed response that included posting a security bond (despite the fact that I was representing IBM). I spent a few hours in my response, won the business and probably netted less than minimum wage for my time and effort. I came to despise the RFP process whether it was for commercial or government entities.

When receiving an unsolicited RFP many sellers get excited. Some even delude themselves into believing their offering is a perfect fit and they have a great chance at winning the business.

Over time sellers begin to realize the only good RFP’s are the ones that you get to wire by making the requirements align with your offering and ideally incorporating features or capabilities that are unique to your offerings.

When receiving an unsolicited RFP most sellers feel compelled to respond. After better understanding how most RFP’s unfold one of my clients reviewed their responses the previous years, removed the ones they had wired and found they had about a 2% win rate on unsolicited RFP’s where they had no influence on establishing the requirements.

We helped devise a strategy to avoid wasting the time of sellers and support people on RFP’s they hadn’t wired:

After reviewing the documents, sellers contacted the person overseeing the RFP (almost always a non-Key Player).

After complimenting him/her on the thoroughness of the RFP, they would ask for access to three (3) Key Players that could likely benefit from the offerings being considered.

The administrator would usually say “no” in which case the seller would indicate that there were some potential unique capabilities and a conversation with Key Players would be needed to determine if they would be relevant.

If the administrator still refused access, sellers would state that in order to justify the time and effort of making a response they would need access to those titles.

At this point the outcomes were either:

Sellers gained access and attempted to introduce additional business outcomes and capabilities and would include them in their bid.

The administrator still refused access in which case sellers would respectfully refuse to bid. The suggestion would be to end the call by saying you hope the organization finds a good fit but if they don’t you’d be willing to bid if access was granted.

I suggest sending a letter or email to make it clear you were willing to bid if granted access. Before declining to bid the sales manager should make the ultimate decision because there may be strategic reasons for bidding even if the chances of winning are remote.

The client I referenced realized a 24% win rate by usually non-bidding when access was not granted.

While sellers may not like RFP’s, if they are successful in wiring bids they actually get the satisfaction of having several competitors spend time effort and resources on low probability opportunities.

For sellers time is precious and wasting time on RFP’s is painful to watch. I find it interesting that sellers, despite being reactive, 1 of 5 will invariably assign a 50% probability to RFP’s they worked on. If they were more honest and projected a 2-10% win rate their managers would ask: